bureau of workers compensation ohio industrial commission...the ohio bureau of workers’...

Greenbook

LBO Analysis of Enacted Budget

Bureau of Workers’ Compensation Ohio Industrial Commission

Ruhaiza Ridzwan, Senior Economist

September 2019

TABLE OF CONTENTS

Quick look... .......................................................................................................................... 1

Agency overview ............................................................................................................................. 1

Bureau of Workers’ Compensation ............................................................................................ 1

Ohio Industrial Commission ....................................................................................................... 2

Appropriation summary .................................................................................................................. 2

Analysis of FY 2020-FY 2021 budget for BWC.......................................................................... 4

Introduction .................................................................................................................................... 4

Category 1: Claims Management .................................................................................................... 5

C1:1: Claims, Risk and Medical Management (ALI 855407) ...................................................... 5

C1:2: Fraud Prevention (ALI 855408) ......................................................................................... 7

Category 2: Administration ............................................................................................................. 7

C2:1: Administrative Services (ALI 855409) ............................................................................... 7

C2:2: Attorney General Payments (ALI 855410) ........................................................................ 8

Category 3: Special Benefit Funds .................................................................................................. 8

C3:1: Coal Workers’ Fund (ALI 855606) ..................................................................................... 8

C3:2: Marine Industry (ALI 855608) ........................................................................................... 9

C3:3: Disabled Workers Relief Fund (ALI 855605) ..................................................................... 9

Category 4: Safety and Hygiene Programs ..................................................................................... 9

C4:1: Safety and Hygiene Operating (ALI 855609) ................................................................... 10

C4:2: Safety Grants (ALI 855610) ............................................................................................. 10

C4:3: Health and Safety Initiative (ALI 855611) ....................................................................... 11

C4:4: Safety Campaign (ALI 855612) ........................................................................................ 11

C4:5: Research Grants (ALI 855613)......................................................................................... 12

C4:6: Substance Use Recovery and Workplace Safety Program (ALI 855618) ........................ 12

C4:7: Safety and Health Center of Excellence (ALI 855619) .................................................... 12

C4:8: OSHA Enforcement (ALI 855601) .................................................................................... 13

C4:9: BLS SOII Grant (ALI 855614) ............................................................................................ 13

C4:10: NIOSH Grant (ALI 855615) ............................................................................................ 13

Analysis of FY 2020-FY 2021 budget for OIC ......................................................................... 14

Operating Expenses (ALI 845321) ................................................................................................. 14

Rent – William Green Building (ALI 845402) ................................................................................ 14

Attorney General Payments (ALI 845410) .................................................................................... 15

Attachments:

BWC Appropriation Spreadsheet

OIC Appropriation Spreadsheet

Legislative Budget Office of the Legislative Service Commission Page 1

LBO Greenbook

Bureau of Workers’ Compensation Ohio Industrial Commission

Quick look...

The workers’ compensation system in Ohio consists of (1) the Bureau of Workers’ Compensation (BWC) – the insurance provider and administrator, and (2) the Ohio Industrial Commission (OIC) – the adjudicator of disputed workers’ compensation claims.

BWC also operates workplace safety consulting services, safety and hygiene training, and other programs for Ohio employers to support them in providing safe and healthy workplaces.

BWC and OIC receive no GRF funding. Workers’ compensation coverage is funded by premiums paid by employers to BWC while BWC’s and OIC’s operations are paid by employers’ assessments.

In January 2019, BWC and OIC had 1,714 and 330 full-time employees, respectively.

The BWC Administrator and an 11-member Board of Directors are appointed by the Governor.

OIC is headed by three commissioners appointed by the Governor.

Agency/Fund Group FY 2018 Actual

FY 2019 Actual

FY 2020 Appropriation


BWC: Dedicated Purpose & Federal $263,973,077 $291,703,518 $319,841,506 $324,787,349

% change -- 10.5% 9.6% 1.5%

OIC: Dedicated Purpose $46,087,747 $46,665,211 $54,640,924 $54,828,778

% change -- 1.3% 17.1% 0.3%

BWC & OIC Total $310,060,824 $338,368,729 $374,482,430 $379,616,127

% change -- 9.1% 10.7% 1.4%

Agency overview

Bureau of Workers’ Compensation

The Ohio Bureau of Workers’ Compensation (BWC) is the largest exclusive workers’ compensation system in the nation1 with approximately $27.9 billion in assets as of January 31, 2019. An exclusive workers’ compensation system is a system in which the state is the sole insurance provider, not private insurers. The Bureau provides workers’ compensation insurance to all public and private employers in Ohio, except for certain companies that have sufficient financial and administrative resources and thus are qualified for self-insured programs. BWC has oversight authority over those self-insured companies. BWC-issued workers’ compensation

1 Currently, there are three other states with exclusive workers’ compensation systems – North Dakota, Washington, and Wyoming.

Greenbook Bureau of Workers’ Compensation & Ohio Industrial Commission


insurance policies cover approximately 60% of Ohio’s workforce, including private, state, and local government employees. In FY 2018, approximately 242,000 employers maintained policies with the Bureau while nearly 1,200 employers qualified for self-insurance. The BWC Board of Directors represents employers, employees, and labor unions, entities that have an interest in workers’ compensation in Ohio. There are five Board subcommittees devoted to oversight of BWC’s actuarial, audit, governance, investment, and medical services and safety policies. In addition to its main office in Columbus, BWC operates 11 customer service offices throughout the state.

Ohio Industrial Commission

The Ohio Industrial Commission (OIC) hears worker and employer appeals of disputed workers’ compensation claims made by BWC and self-insured employers. Disputed claims typically involve conflicts over the extent of medical services provided or lost-time (otherwise known as indemnity) benefits. Disputed claims are heard at three levels: (1) the first hearing is made before District Hearing Officers (DHOs), (2) if the DHO’s hearing is appealed, the second hearing is conducted by Staff Hearing Officers (SHOs), and (3) if that is appealed, the third hearing is held at the Commission’s level. Hearings take place at 12 OIC offices statewide. In FY 2018, the Commission heard about 112,000 disputed claims at all three levels. The average time for a first-level hearing and a second-level hearing from their filing date was 38 days and 35 days, respectively. The statutory requirement to adjudicate the first and second-level hearings is 45 days. OIC operations are funded through an administrative assessment that is added to employers’ workers’ compensation premiums paid to BWC and transferred to OIC. The Commission is led by a panel of three commissioners. Each commissioner must have at least six years of experience in workers’ compensation and at least one member must be licensed to practice law in Ohio. One member represents employees, one represents employers, and one represents the public.

Appropriation summary

The table in the “Quick look” section shows appropriations in the enacted budgets for BWC and OIC contained in H.B. 80 and H.B. 79, respectively. Neither agency receives funding from the GRF. Funding for their operations is primarily derived from assessments paid by employers. In addition, BWC receives some federal grants. In FY 2019, the actual expenditures for BWC and OIC were $291.7 million and $46.7 million, respectively.

H.B. 80 appropriates $319.8 million in FY 2020 for BWC. This amount is $28.1 million (9.6%) higher than actual expenditures in FY 2019. The appropriation for FY 2020 includes additional funding for the 27th paycheck that would occur in that fiscal year2 and pay raises under the new bargaining contract. BWC’s appropriation for FY 2021 is $324.8 million, which is $4.9 million (1.5%) higher than the appropriation for FY 2020. Increases in BWC’s total appropriation in FY 2020 are largely due to funding increases in all line items, except for line item 855610, Safety Grants. Increases in all line items are largely related to payroll costs mentioned above. The enacted budget also provides BWC with federal funding of

2 Most fiscal years have 26 paychecks.



approximately $1.9 million each in FY 2020 and FY 2021. This amount is about $90,500 lower than the actual federal funding of $2.0 million in FY 2019. The decrease in federal funding for the FY 2020-FY 2021 biennium is primarily due to decreases in funding from federal grants from the U.S. National Institute for Occupational Safety and Health (NIOSH) and the Occupational Safety and Health Administration (OSHA).

The enacted budget authorizes the Director of Natural Resources to annually request the Administrator of Workers’ Compensation to transfer up to $1 million of the net position of the Coal-Workers Pneumoconiosis Fund to the Mining Regulation and Safety Fund created in the Coal Surface Mining Law by July 1 or as soon as possible thereafter. The enacted budget requires the Administrator, with the advice and consent of the BWC Board of Directors, to adopt rules governing the transfer to ensure the solvency of the Coal-Workers Pneumoconiosis Fund. H.B. 80 also makes a technical correction to replace an obsolete cross-reference with the correct cross-reference for the purposes of defining “apprentice” and “apprenticeship agreement” in the Workers’ Compensation Law.

H.B. 79 appropriates $54.6 million for OIC in FY 2020. This amount is about $8.0 million higher than actual expenditures in FY 2019. The appropriation for FY 2020 includes additional funding for the 27th paycheck that would occur in that fiscal year. OIC’s appropriation for FY 2021 is $54.8 million. This amount is about $188,000 higher than the appropriation for FY 2020. Increases in OIC’s appropriations in FY 2020 and FY 2021 are primarily due to increases in line item 845321, Operating Expenses. Appropriation in line item 845321 accounts for about 91% of OIC’s total budget in each fiscal year.



Analysis of FY 2020-FY 2021 budget for BWC

Introduction

This section provides an analysis of each appropriation line item (ALI) in BWC’s budget. For organizational purposes, these ALIs are grouped into four major categories based on their funding purposes. The analysis for an ALI with a lower category or subcategory designation will appear before that for an ALI with a higher category or subcategory designation. That is, the analysis for an ALI with a category designation of C1:8 will appear before the analysis for an ALI with a category designation of C2:1 and the analysis for an ALI with a category designation of C1:3 will appear before the analysis for an ALI with a category designation of C1:8.

To aid the reader in locating each ALI in the analysis, the following table shows the category in which each ALI has been placed, listing the ALIs in order within their respective fund groups and funds. This is the same order the ALIs appear in the BWC enacted budget.

In the analysis, each line item’s actual expenditures for FY 2019 and appropriations for FY 2020 and FY 2021 are listed in a table. Following the table, a narrative describes how the appropriation is used and any changes affecting the appropriation that are included in the enacted budget.

Categorization of BWC’s Appropriation Line Items for Analysis of FY 2020-FY 2021 Enacted Budget

Fund ALI ALI Name Category

Dedicated Purpose Fund Group

7023 855407 Claims, Risk and Medical Management 1 Claims Management

7023 855408 Fraud Prevention 1 Claims Management

7023 855409 Administrative Services 2 Administration

7023 855410 Attorney General Payments 2 Administration

8220 855606 Coal Workers’ Fund 3 Special Benefit Funds

8230 855608 Marine Industry 3 Special Benefit Funds

8250 855605 Disabled Workers Relief Fund 3 Special Benefit Funds

8260 855609 Safety and Hygiene Operating 4 Safety and Hygiene Programs

8260 855610 Safety Grants 4 Safety and Hygiene Programs

8260 855611 Health and Safety Initiative 4 Safety and Hygiene Programs

8260 855612 Safety Campaign 4 Safety and Hygiene Programs

8260 855613 Research Grants 4 Safety and Hygiene Programs

8260 855618 Substance Use Recovery and Workplace Safety Program

4 Safety and Hygiene Programs

8260 855619 Safety and Health Center of Excellence 4 Safety and Hygiene Programs

Federal Fund Group

3490 855601 OSHA Enforcement 4 Safety and Hygiene Programs

3FW0 855614 BLS SOII Grant 4 Safety and Hygiene Programs

3FW0 855615 NIOSH Grant 4 Safety and Hygiene Programs



Category 1: Claims Management

This category of appropriation line items provides funding for BWC’s claims management functions. These items also fund oversight and communications related to the Bureau’s managed care system under which medical claims are handled. In addition, this category includes funding for BWC’s fraud prevention and detection efforts.

C1:1: Claims, Risk and Medical Management (ALI 855407)

Fund/ALI FY 2019 Actual



7023 ALI 855407, Claims, Risk and Medical Management

$116,138,603 $120,939,816 $124,329,031

% change -- 4.1% 2.8%

The appropriation for FY 2020 is $4.8 million higher than the actual expenditures for FY 2019. Total appropriation for FY 2021 is $3.4 million higher than the appropriation for FY 2020. This line item accounts for about 38% of BWC’s budget in each fiscal year.

This line item supports personnel, maintenance, and equipment costs associated with BWC’s claims, risk, and medical management programs, including Injury Management, Employer Services, and Customer Service operations. The line item also supports BWC’s Safety Violations Program, which prepares reports concerning alleged safety violations that OIC uses to determine Violations of Specific Safety Requirements (VSSRs) and actions required to correct any violations. Finally, the line item supports BWC’s Ombudsman’s Office. This office answers inquiries and investigates complaints made concerning the processing of claims by employers, injured workers, and medical providers. The various functions funded by the appropriation, as well as the recommended funding levels for each, are listed in the table below.

Uses of Fund 7023 ALI 855407, Claims, Risk and Medical Management

Function FY 2020 % of Total FY 2021 % of Total

Field Operations $71,568,489 59.2% $72,180,491 58.1%

Injury Management Services $16,039,629 13.3% $18,801,250 15.1%

Employer Services $22,262,497 18.4% $21,846,535 17.6%

Customer Contact Center $5,492,961 4.5% $5,874,083 4.7%

Self-Insured Services $3,262,522 2.7% $3,289,614 2.6%

Safety Violations Investigations $1,015,125 0.8% $1,027,785 0.8%

Ombudsperson $770,140 0.6% $775,472 0.6%

Special Investigations* $528,453 0.4% $533,801 0.4%

Total $120,939,816 100.0% $124,329,031 100.0%

*Additional funding for the Special Investigation Department is included in line item 855408, Fraud Prevention.



Field Operations

The funding for Field Operations accounts for the largest portion of appropriations in this line item each fiscal year. Field Operations is responsible for providing claims services to injured workers and employers. In addition to providing initial determinations of claims, Field Operations handles additional allowances in medical-only claims and processes requests for claims to receive hearings by OIC.

Injury Management Services

Injury Management Services oversees the Bureau’s medical, pharmaceutical, and vocational rehabilitation providers, including 12 managed care organizations (MCOs) currently certified to manage injury claims. The program serves roughly 250,000 active claims per year.

Employer Services

Employer Services is responsible for developing and implementing workers’ compensation insurance products and providing underwriting and technical support for employers, including “Destination: Excellence,” a discount rating plan that allows employers to choose among several programs intended to promote workplace wellness, return-to-work strategies, and accident prevention. Employer Services also oversees the BWC group rating discount program for private and public employers. This operation annually manages approximately 250,000 employer policies relative to statewide coverage initiation, policy maintenance, and payroll processing.

Customer Contact Center

The Customer Contact Center provides information regarding BWC’s processes, law, policies, and procedures to employers, injured workers, health care providers, and MCOs. It also assists new employers in obtaining BWC coverage and helps employers that already have coverage with policy account information regarding invoices, payroll data, and other issues. The Center fielded approximately 400,000 customer inquiries annually.

Self-Insured Services

Self-Insured Services is responsible for auditing self-insuring employers for compliance with the Workers’ Compensation Law and BWC administrative rules. Additionally, this section processes assessment invoices for self-insured employers and assumes responsibility for the administration of claims in cases of default or bankruptcy of self-insured employers.

Safety Violations

The Safety Violations Program prepares reports concerning alleged safety violations that the Industrial Commission uses to determine VSSRs and actions required to correct any violations. In FY 2018, the program conducted about 350 such investigations.

Ombudsperson

BWC’s Ombudsperson’s Office is responsible for answering inquiries and investigating complaints made about the processing of claims.



C1:2: Fraud Prevention (ALI 855408)




7023 ALI 855408, Fraud Prevention $13,007,705 $14,095,916 $14,231,413

% change -- 8.4% 1.0%

The appropriation for FY 2020 is $1.1 million higher than actual expenditures in FY 2019. The increase in the appropriation in FY 2020 is largely due to higher administrative costs of BWC and security upgrades at its various facilities. This item supports the Special Investigations Department, which is responsible for investigating and deterring fraud committed by employers, injured workers, or medical service providers. The Special Investigations staff works closely with local and state prosecutors, including the Ohio Attorney General. The line item also provides for security services at BWC’s facilities throughout the state.

Category 2: Administration

This category of appropriation line items provides funding for the administrative functions related to management of the workers’ compensation system in the state, including constructing sound actuarial and investment strategies for the State Insurance Fund and other funds that support injured workers. This category also includes appropriations for payments that BWC makes to cover the operating expenses of the Workers’ Compensation Section within the Attorney General’s Office.

C2:1: Administrative Services (ALI 855409)




7023 ALI 855409, Administrative Services $105,545,131 $117,250,236 $116,025,396

% change -- 11.1% -1.0%

The appropriation for this line item accounts for about 36% of the enacted budget. This item supports general administrative duties within the Bureau in seven divisions: (1) Fiscal and Planning, (2) Actuarial, (3) Investments, (4) Human Resources, (5) Legal, (6) Infrastructure and Technology, and (7) Internal Audit. The Fiscal and Planning Division oversees fiscal management, general accounting, payroll, and other fiscal functions for BWC. This Division is also responsible for receipt and distribution of agency funds including benefits payable to injured workers. The Actuarial Division maintains the stability of the State Insurance Fund by setting premium rates and claims reserves and assists Employer Services in the creation of ratings plans. The Investments Division invests the assets of the State Insurance Fund according to the investment policy established by BWC’s Board of Directors. The Human Resources Division provides leadership and guidance to BWC management and staff in areas of equal employment opportunity, employee and labor relations, payroll and benefits, and quality services. The Legal Division provides legal advice to BWC on claims procedures and policy, and represents the State Insurance Fund in administrative appeals. The Infrastructure and



Technology Division is responsible for all computer equipment and software maintenance. Internal Audit evaluates the effectiveness of BWC’s internal controls; validates agency compliance with policies, applicable laws, and regulations; and evaluates business processes to ensure that risks are mitigated and agency objectives can be met. The appropriation increase in the enacted budget in FY 2020 is largely due to increases in payroll costs, including pay raises under the new bargaining contract and the 27th paycheck in FY 2020.

C2:2: Attorney General Payments (ALI 855410)




7023 ALI 855410, Attorney General Payments $4,523,726 $4,621,850 $4,621,850

% change -- 2.2% 0.0%

The appropriation for this item in FY 2020 is about $98,000 higher than the actual spending in FY 2019. The appropriation for FY 2021 is identical to the appropriation for FY 2020. This item supports half of the cost of the legal services of the Attorney General’s Workers’ Compensation Section. The remaining half is paid by OIC. The Workers’ Compensation Section provides legal counsel to BWC and OIC. Most cases are appeals of workers’ compensation claims filed in county common pleas courts. In addition, temporary law included within the enacted budget requires that up to $828,200 be used specifically to pay the expenses of the Workers’ Compensation Fraud Unit of the Attorney General’s Office. In contrast with other costs split with OIC, the Bureau pays all costs associated with the Fraud Unit.

Category 3: Special Benefit Funds

This category of appropriation line items supports operating costs associated with policies and claims offered through the following three special funds. The special funds provide cost-of-living adjustments and supplemental benefits to certain injured workers. The additional workers’ compensation coverage for coal workers and maritime workers are required by federal law. However, BWC is not obligated to provide such coverage; employers that hired coal workers and maritime workers may obtain the federally required coverage through BWC’s special funds or private insurers. In addition, the Disabled Workers Relief Fund provides cost-of-living adjustments and supplements benefits for permanently and totally disabled workers. Sources of funding for the Special Benefit Funds are additional assessments on specified employers. For all three funds, the increase in the enacted budget in FY 2020 is largely related to payroll costs, including pay raises under the new bargaining contract and the 27th paycheck in that fiscal year.

C3:1: Coal Workers’ Fund (ALI 855606)




8220 ALI 855606, Coal Workers’ Fund $147,330 $186,632 $188,487

% change -- 26.7% 1.0%



This item is used to pay operating costs associated with the Coal Workers’ Pneumoconiosis Fund (Fund 8220), which provides benefits for workers who are disabled due to pneumoconiosis, or “black lung” disease, as dictated by the federal Coal Mine Health and Safety Act of 1969. The fund is maintained through a premium charge, in addition to regular State Insurance Fund premiums, paid by coal operators, including certain other employers engaged in coal mine construction, maintenance, and coal transportation that elect to insure payment of benefits required by the federal Act.

C3:2: Marine Industry (ALI 855608)




8230 ALI 855608, Marine Industry $51,465 $78,188 $78,698

% change -- 51.9% 0.7%

This item is used to pay operating costs associated with the Marine Industry Fund (Fund 8230), which provides benefits to injured dock workers and other maritime employees that are not seamen, as required by the Longshoreman’s and Harbor Workers’ Compensation Act Amendments of 1972. The fund is maintained through a premium charge, in addition to regular State Insurance Fund premiums, that is paid by marine industry employers who elect to insure payment of benefits required by this Act.

C3:3: Disabled Workers Relief Fund (ALI 855605)




8250 ALI 855605, Disabled Workers Relief Fund $159,104 $193,419 $195,709

% change -- 21.6% 1.2%

This item pays operating costs associated with the Disabled Workers Relief Fund (DWRF). The fund provides supplemental cost-of-living benefits to permanently and totally disabled workers. Approximately 12,584 permanently and totally disabled individuals are receiving benefits from the DWRF.

Category 4: Safety and Hygiene Programs

This category of appropriation line items provides funding for BWC programs geared toward ensuring that employers meet applicable safety standards and laws. The funding is also used to provide safety training to employers. The bulk of operating revenue for the Division of Safety and Hygiene, which oversees the various programs within this category of appropriations, comes from an assessment charged to employers. The assessment is 1.0% of paid premiums for private employers, and for public employers. The Division also operates using a small portion of federal funding.



C4:1: Safety and Hygiene Operating (ALI 855609)




8260 ALI 855609, Safety and Hygiene Operating $22,339,237 $24,079,350 $23,745,661

% change -- 7.8% 1.4%

This item supports the operations of the Division of Safety and Hygiene. The Division is responsible for ensuring that employers provide safe work environments through the investigation of industrial accidents and occupational diseases and through programs designed to prevent these problems. The Division’s responsibilities include (1) making targeted visits to employers with high frequency of accidents to educate them on risk and safety management, (2) providing safety and health consultative services to Ohio’s public employers, (3) administering the Safety Grants Program (see line item 855610, Safety Grants, below) that assists employers with the cost of implementing programs designed to reduce cumulative stress disorder and other injuries, and (4) supporting local safety councils, which offer educational resources for safety and health in the workplace.

During FY 2018, the Safety and Hygiene Division provided 18,554 web-based and onsite training services in industrial hygiene, industrial and construction safety, ergonomics, and risk and safety management. The Division also provided 96 courses through 407 classes at 13 locations. In regard to public employers, the Public Employment Risk Reduction Program (PERRP) ensures that public employers in Ohio are operating safe workplaces pursuant to state and federal law. Requirements include reporting hospitalizations and deaths from serious workplace injuries to BWC. PERRP also has the authority to investigate complaints about unsafe work conditions and issue citations. In addition to this enforcement element, the Safety and Hygiene Division offers public employers consultation and training designed to reduce workplace hazards and eliminate unsafe conditions. The increase in the enacted budget in FY 2020 is largely related to payroll costs, including pay raises under the new bargaining contract and the 27th paycheck in FY 2020.

C4:2: Safety Grants (ALI 855610)




8260 ALI 855610, Safety Grants $21,830,183 $20,000,000 $20,000,000

% change -- -8.4% 0.0%

This appropriation item supports the Safety Grants Program. The program offers private and public State Insurance Fund employers funding for training, wellness programs, and equipment intended to reduce workplace injuries and illnesses. The Controlling Board approved an increase in funding for FY 2019 from $15.0 million to $20.0 million for this line item on September 10, 2018. The increase was used for additional safety grant programs for Ohio police departments, schools, and state agencies. The program includes the Safety Intervention Grant (SIG) Program, the Firefighter Exposure to Environmental Elements Grant (FEEEG), the



Employers Working with Persons with Developmental Disabilities (EWPDD) Grant, and the School Safety and Security Grant (SSSG).

The SIG Program provides financial assistance to buy ergonomic or safety-enhancing equipment. The FEEEG Program is available only to Ohio firefighter employers; eligible employers may receive up to $15,000 for the duration of the grant program. The EWPDD Grant Program is used to assist employers with ensuring the safety of their staff when carrying out the services for developmentally disabled children and adults; eligible Ohio employers may receive up to $20,000 for the duration of the grant program. The SSSG Program is used to provide assistance to Ohio employers with ensuring the safety of their staff who instruct children in the state. In FY 2018, a total of $0.6 million was awarded under the SSSG Program. The SSSG Program is available only to Ohio employers that operate licensed preschool through 12th grade educational facilities; eligible employers may receive up to $40,000 for the duration of the grant program.

The Safety Grant Program also provides grants under the Drug-Free Safety Program (DFSP) Grants and the Workplace Wellness Grant Program (WWGP). DFSP assists employers in developing and implementing drug-free workplace programming. In FY 2018, a total of $13,648 was awarded under DFSP to 14 employers. WWGP helps employers in developing workplace health promotion programs, including health risk appraisals and biometric screening, as well as fitness programs provided by outside vendors.

C4:3: Health and Safety Initiative (ALI 855611)




8260 ALI 855611, Health and Safety Initiative $4,177,034 $6,000,000 $6,000,000

% change -- 43.6% 0.0%

This item is used to implement an employer health and wellness program that targets small employers (150 or fewer employees) in specific high-risk industries, as well as injured workers with certain types of injuries. The initiative also includes smoking cessation programs, health coaching, and chronic disease management.

C4:4: Safety Campaign (ALI 855612)




8260 ALI 855612, Safety Campaign $1,356,858 $1,500,000 $1,500,000

% change -- 10.5% 0.0%

This item is used for the creation and operation of a statewide safety awareness and education campaign dealing with the avoidance of slips, trips and falls, overexertion, and motor vehicle accidents. This campaign also involves online and mobile training tools that address workplace safety.



C4:5: Research Grants (ALI 855613)




8260 ALI 855613, Research Grants $224,969 $2,000,000 $2,000,000

% change -- 789.0% 0.0%

This item is used to pay for the Ohio Occupational Safety and Health Research Program, which focuses on maximizing the impact research efforts in the areas of occupational safety and health have on the overall safety, health, productivity, and competitiveness of Ohio’s workforce. This competitive program provides up to $250,000 for each selected research project. The duration of each research project is limited to 12 to 24 months. Only colleges, universities, and not-for-profit research institutions located within the state of Ohio are eligible. Funding for this program was originally established by the Controlling Board on September 10, 2018.

C4:6: Substance Use Recovery and Workplace Safety Program (ALI 855618)




8260 ALI 855618, Substance Use Recovery and Workplace Safety Program

$215,582 $5,000,000 $10,000,000

% change -- 2,219.3% 100.0%

This appropriation item is used to pay for the operation of the Substance Use Recovery and Workplace Safety Program. Funding for a pilot program was originally established by the Controlling Board on September 24, 2018. The enacted budget appropriates an additional $4.8 million and $9.8 million for this program in FY 2020 and FY 2021, respectively, compared to actual expenditures in FY 2019.

C4:7: Safety and Health Center of Excellence (ALI 855619)




8260 ALI 855619, Safety and Health Center of Excellence

$0 $2,000,000 $0

% change -- -- -100.0%

The enacted budget creates this line item. The appropriation in FY 2020 will be used to establish a center of excellence at the Ohio Center of Occupational Safety and Health.



C4:8: OSHA Enforcement (ALI 855601)




3490 ALI 855601, OSHA Enforcement $1,678,966 $1,676,000 $1,676,000

% change -- -0.2% 0.0%

This item is used to support OSHA’s On-Site Consultation Program, which provides small private employers with services related to workplace safety and health. Services are provided to employers with fewer than 250 employees at fixed sites and with no more than 500 employees corporate-wide. Under the program, employers can learn about potential hazards at their workplaces, improve their safety and health management systems, and may qualify for an exemption from routine OSHA inspections. State matching funds for the program are provided by Fund 8260, line item 855609, Safety and Hygiene Operating.

C4:9: BLS SOII Grant (ALI 855614)




3FW0 ALI 855614, BLS SOII Grant $143,106 $195,104 $195,104

% change -- 36.3% 0.0%

This item is used to fund BWC’s participation in the U.S. Bureau of Labor Statistics (BLS) Survey of Occupational Injuries and Illnesses (SOII). SOII is an establishment-based survey used to estimate incidence rates and counts of workplace injuries and illnesses and is a cooperative effort between the U.S. Department of Labor and agencies in participating states.3 Funding in this line item comes from BLS.

C4:10: NIOSH Grant (ALI 855615)




3FW0 ALI 855615, NIOSH Grant $164,519 $24,995 $0

% change -- -84.8% -100.0%

This item supports an initiative that uses BWC claim and policy systems for surveillance and prevention of occupational injuries, illnesses, fatalities, and exposures to occupational hazards. Data are then analyzed to develop rates of claims for injuries per FTE by employer size, sector, and type of injury. Funding in this line item comes from grants through the U.S. National Institute for Occupational Safety and Health (NIOSH).

3 This survey is the only comprehensive measure of work-related injuries and illnesses in American workplaces. As such, it is relied on by employers, employees, public policy makers, and researchers.



Analysis of FY 2020-FY 2021 budget for OIC

The OIC budget consists of three line items, all of which are supported by administrative assessments paid by Ohio employers that are paid in addition to workers’ compensation premium payments. Assessments are collected by BWC and transferred upon receipt to the Industrial Commission Operating Fund (Fund 5W30).

Operating Expenses (ALI 845321)




5W30 ALI 845321, Operating Expenses $41,840,053 $49,697,274 $49,885,128

% change -- 18.8% 0.4%

Appropriations in this line item represent about 91% of OIC’s total appropriations for the biennium. This item supports the claims adjudication function within the state’s workers’ compensation system. Disputed claims typically involve the extent of medical services provided or lost-time benefits. The Commission’s operations are organized geographically within five regions: Akron, Cincinnati, Cleveland, Columbus, and Toledo. Within these regions, there are district offices at 12 locations. The increase in the enacted budget in FY 2020 is largely related to payroll costs, including pay raises under the new bargaining contract and the 27th paycheck in the fiscal year. Other increases are associated with technology and security upgrades and mailing costs. OIC is currently required, under the statute, to provide paper hearing notices and hearing orders to all parties to a claim. Annually, OIC sends approximately 1.2 million pieces of mail.

Rent – William Green Building (ALI 845402)




5W30 ALI 845402, Rent $1,031,507 $1,150,000 $1,150,000

% change -- 11.5% 0.0%

This item is used to pay rent and miscellaneous maintenance costs for OIC’s offices located in the William Green Building in Columbus. The appropriation in FY 2020 is about $118,500 higher than actual spending in FY 2019. The appropriation for FY 2021 is the same as that of the first year of the biennium.



Attorney General Payments (ALI 845410)




5W30 ALI 845410, Attorney General Payments $3,793,650 $3,793,650 $3,793,650

% change -- 0.0% 0.0%

This item pays for OIC’s portion of the costs related to the legal services of the Attorney General’s Workers’ Compensation Section. The remaining portion of the cost is paid by BWC. The Attorney General provides investigative and other legal services related to workers’ compensation cases. The yearly appropriation in this budget is identical to actual expenditures in FY 2019.

BWC & OIC/zg

All Fund Groups

Line Item Detail by Agency

FY 2020 - FY 2021 Final Appropriations

FY 2018

Appropriations Appropriations

FY 2019 FY 2020 FY 2021% Change

FY 2019 to FY 2020

% Change

FY 2020 to FY 2021

BWC BudgetReport For: Version: As Enacted

Bureau of Workers' CompensationBWC$ 107,957,5947023 855407 Claims, Risk and Medical Management $ 120,939,816 $ 124,329,031$ 116,138,603 2.80%4.13%

$ 12,802,6287023 855408 Fraud Prevention $ 14,095,916 $ 14,231,413$ 13,007,705 0.96%8.37%

$ 104,133,3807023 855409 Administrative Services $ 117,250,236 $ 116,025,396$ 105,545,131 -1.04%11.09%

$ 4,621,8507023 855410 Attorney General Payments $ 4,621,850 $ 4,621,850$ 4,523,726 0.00%2.17%

$ 150,9318220 855606 Coal Workers' Fund $ 186,632 $ 188,487$ 147,330 0.99%26.68%

$ 48,3968230 855608 Marine Industry $ 78,188 $ 78,698$ 51,465 0.65%51.92%

$ 49,0978250 855605 Disabled Workers Relief Fund $ 193,419 $ 195,709$ 159,104 1.18%21.57%

$ 21,080,1148260 855609 Safety and Hygiene Operating $ 24,079,350 $ 23,745,661$ 22,339,237 -1.39%7.79%

$ 9,127,5048260 855610 Safety Grants $ 20,000,000 $ 20,000,000$ 21,830,183 0.00%-8.38%

$ 1,245,1898260 855611 Health and Safety Initiative $ 6,000,000 $ 6,000,000$ 4,177,034 0.00%43.64%

$ 843,0008260 855612 Safety Campaign $ 1,500,000 $ 1,500,000$ 1,356,858 0.00%10.55%

$08260 855613 Research Grants $ 2,000,000 $ 2,000,000$ 224,969 0.00%789.01%

$08260 855618 Substance Use Recovery and Workplace Safety Program $ 5,000,000 $ 10,000,000$ 215,582 100.00%2,219.30%

$08260 855619 Safety and Health Center of Excellence $ 2,000,000 $ 0$0 -100.00%N/A

$ 262,059,683Dedicated Purpose Fund Group Total $ 317,945,407 $ 322,916,245$ 289,716,927 1.56%9.74%

$ 1,630,6543490 855601 OSHA Enforcement $ 1,676,000 $ 1,676,000$ 1,678,966 0.00%-0.18%

$ 132,3933FW0 855614 BLS SOII Grant $ 195,104 $ 195,104$ 143,106 0.00%36.34%

$ 150,3473FW0 855615 NIOSH Grant $ 24,995 $ 0$ 164,519 -100.00%-84.81%

$ 1,913,394Federal Fund Group Total $ 1,896,099 $ 1,871,104$ 1,986,591 -1.32%-4.56%

$ 263,973,077 $ 319,841,506 $ 324,787,349Bureau of Workers' Compensation Total $ 291,703,518 1.55%9.65%

Legislative Budget Office of the Legislative Service Commission 1

All Fund Groups

Line Item Detail by Agency

FY 2020 - FY 2021 Final Appropriations

FY 2018

Appropriations Appropriations

FY 2019 FY 2020 FY 2021% Change

FY 2019 to FY 2020

% Change

FY 2020 to FY 2021

OIC BudgetReport For: Version: As Enacted

Ohio Industrial CommissionOIC$ 41,276,2605W30 845321 Operating Expenses $ 49,697,274 $ 49,885,128$ 41,840,053 0.38%18.78%

$ 1,017,8385W30 845402 Rent - William Green Building $ 1,150,000 $ 1,150,000$ 1,031,507 0.00%11.49%

$ 3,793,6505W30 845410 Attorney General Payments $ 3,793,650 $ 3,793,650$ 3,793,650 0.00% 0.00%

$ 46,087,747Dedicated Purpose Fund Group Total $ 54,640,924 $ 54,828,778$ 46,665,211 0.34%17.09%

$ 46,087,747 $ 54,640,924 $ 54,828,778Ohio Industrial Commission Total $ 46,665,211 0.34%17.09%

Legislative Budget Office of the Legislative Service Commission 1

bureau of workers compensation ohio industrial commission...the ohio bureau of workers’...

Documents